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Dow Chemical has poured money into lobbying efforts over the last decade as other
corporate giants have remained steady or even pulled back on their spending.

Lobbying expenditures by the company nearly tripled between 2008 and 2016, according
to a Bloomberg BNA review of disclosure filings, from $5.2 million to $13.5 million
annually.

The company is in the process of seeking Justice Department approval for a $79 billion
merger with Dupont Co.

Collectively, companies involved in agrichemical mergers—Dow, Dupont, Bayer AG, Monsanto
Co., and Syngenta AG—spent
$1.6 million more in the first quarter of 2017 over the same period last year, and
2.7 times the expenditures for the first quarter of 2008.

A look at Dow’s year-on-year quarterly spending is even more impressive: resources
for lobbying jumped nearly eightfold in the first quarter of 2017 compared to the
first quarter of 2008. At $5.2 million, Dow is the seventh-biggest spender on lobbying
for the first quarter of 2017, as revealed in forms
filed with the Senate April 20.

Close Relationship with Trump

The filings also show that Dow hired a lobbying firm to meet with members of Congress
on issues before the Agriculture Department and the EPA weeks before an agency deadline
to act on the insecticide chlorpyrifos, which is widely used on fruits and vegetables
and was developed by the company. EPA denied to restrict the pesticide on March 29.

The merger with Dupont is just one of multiple concerns the company is raising with
policymakers. While the merger has dominated the company’s priorities more recently,
it’s probably not the biggest reason for the growth in lobbying spending, said Alex
Vogel, co-founder of the VogelHood Group, a Washington, D.C. public affairs firm.
Regulatory pressures, and high-stakes bills like last year’s reform of the Toxic Substances
Control Act, are more likely drivers than the upcoming merger decision, he said.

“There are numerous justifications for them to be more engaged in addition to the
merger,” Vogel told Bloomberg BNA.

An apparent close relationship to President Donald Trump’s administration—CEO Andrew
Liveris was appointed to head a White House manufacturing council and donated $1 million
to Trump’s inauguration—also has raised questions over the company’s influence in
government.

Liveris “has extraordinary access in the White House, chairs a group that advises
Mr. Trump, was there when Mr. Trump signed his executive order relating to cutting
back regulation,”
Norm Eisen, a fellow with the Brookings Institution and former adviser to President
Barack Obama on government ethics, said in a recent interview on PBS NewsHour. “It
doesn’t smell right.”

Merger Fever and More Spending in 2017

Financially, the company can afford it. Dow reported $888 million in net income for
the first quarter of 2017 in its April 27
earnings statement, more than five times the amount reported for the same period last year.

Dow tends to front-load its lobbying spending early in the year to cover trade association
dues, said Rachelle Schikorra, associate director for Dow’s public affairs. Dow
paid $4.8 million in 2015 to the American Chemistry Council and the U.S. Chamber of Commerce,
and other groups in dues.

“Historically, our first and second quarter reports . . . are higher than subsequent
quarters throughout the year,”
Schikorra told Bloomberg BNA in an email.

Dow Chemical and DowAgroSciences began combining their respective filings in 2014—a
year in which spending records show an increase to $14.4 million from $10.7 million
over the previous year. This boosted the collective number attributed to advocacy
despite an overlap in activities, said Schikorra.

Compared to Dow, many of the top spenders in 2008 have significantly pulled back on
their spending. ExxonMobil, which spent $29 million in 2008, has decreased its spending
about 10 percent per year since, and Pacific Gas & Electric Corp. cut its lobbying
budget by about 25 percent per year, according to an analysis prepared by VogelHood.

Lobbying Spikes Under Trump

Dow’s spending stands out. Other companies planning agrichemical mergers—which include
biotechnology units that produce genetically-engineered seeds—have either remained
steady or fluctuated in the last decade.

Spending for Bayer—which is planning a
$66 billion buyout of Monsanto—has zigzagged between $4.2 million and $8.3 million
per year since 2008. Dupont’s spending peaked in 2014 at $10.2 million—up from $4.2
million in 2008—but has since dipped back down to $5.5 million. Monsanto’s lobbying
expenditures have dropped by half, from $8.8 million in 2008 to $4.6 million last
year. Syngenta, which is planning to merge with ChemChina, has kept its lobbying spending
around $1 million per year during that period.

As congressional gridlock intensified during the Obama administration, many companies—seeing
their priorities lost in the bickering—shed their lobbying contracts. The Trump administration’s
anti-regulatory focus is likely to reinvigorate interest in lobbying said Tyson Slocum,
who oversees federal policy related to commodity markets as director of the nonprofit
Public Citizen’s Energy Program.

But more spending doesn’t necessarily mean smooth sailing, Slocum warned. For example,
CEO Liveris has come out against increasing exports of liquefied natural gas, a move
that would raise domestic prices for the industrial chemical feedstock. But the Trump
administration has taken the opposite tack, with Energy Secretary Rick Perry and top
economic adviser Gary Cohn backing plans to build LNG export terminals.

“You are absolutely going to see spikes”
in spending with the new administration, Slocum told Bloomberg BNA. But “right now,
I don’t know what kind of returns they are going to see.”

Dow, Syngenta, Monsanto Add Environmental Lobbyists

Dow Agrosciences was one of three firms to hire lobbyists on environmental policy
in the last few months.

Cornerstone Government Affairs is
representing Dow’s seed-and-pesticide branch in meetings with members of Congress on reforming
the Endangered Species Act and the Federal Insecticide, Fungicide and Rodenticide
Act, pollinator protection, USDA biotechnology programs, and the EPA’s pesticide risk
assessments. Cornerstone—which has several clients tied to farming, forestry and ranching—assigned
four lobbyists to these issues and spent $20,000.

Dow achieved a significant regulatory victory last month when EPA Administrator Scott
Pruitt announced that it would not grant environmentalists’ petition to ban nearly
all uses of chlorpyrifos, a broad spectrum and widely used insecticide. Pruitt reversed
the Obama administration’s plan to restrict the insecticide due to its association
with neurodevelopmental delays in children, which is largely based on studies that
Dow views as weak. The green groups have challenged Pruitt’s decision in the U.S.
Court of Appeals for the Ninth Circuit (
Pesticide Action Network N. Am. v. EPA, 9th Cir., 14-72794, 4/5/17
).

“Dow’s lobbying spending aligns to strategic areas of focus for the company which
can vary from year to year,” spokeswoman Schikorra said.

Cornerstone began lobbying for Dow on March 15, according to its registration
form, two weeks before the EPA denied the petition. On April 13, Dow and two other pesticide
manufacturers
asked Cabinet members to re-evaluate scientific findings on protecting endangered species
from insecticides, including chlorpyrifos.

Environmental advocates criticized the company’s perceived sway in the new administration
when news of the letter emerged on April 20.

“When you look at the amount of money that Dow puts into lobbying and donations to
politicians and how adamantly they oppose reasonable restrictions, wouldn’t that money
be better spent dealing with the underlying issue?” Center for Biological Diversity
government affairs director Brett Hartl told Bloomberg BNA. “Instead of just lobbying
to prevent the status quo, why don’t you just do the right thing?”

Syngenta also
deployed lobbyists from Squire Patton Boggs LLC to meet with members of Congress on the regulatory
framework for pesticides, Endangered Species Act reform and conservation. The EPA
is currently conducting a review of Syngenta’s atrazine herbicide and has said it
will submit the ecological risk assessment to a panel of outside scientists for peer
review later this year. Since the herbicide was last registered in 2003, several new
studies have been published on its environmental and health effects.

Monsanto
hired SBL Strategies partner and former Sen. James Inhofe (R-Okla.) staffer Chad Bradley
to lobby Congress on environmental policy. Monsanto is pushing for a swift re-registration
of glyphosate, the main ingredient in its Roundup weedkiller, as it fights back a
European finding in 2015 that the herbicide probably causes cancer.

California recently announced that it would list glyphosate as a carcinogen under
its Proposition 65 law, which requires labeling of substances known to cause cancer
or create reproductive problems. Monsanto is challenging the decision in the state’s
Court of Appeals (
Monsanto v. OEHHA, Cal. Super. Ct., 16CECG00183, 3/22/17
).

“In one way or another, we are all connected to agriculture and the hard work of farmers,”
said Monsanto spokeswoman Charla Lord in an email, when asked about the renewed focus
on environmental policy.

“Our level of engagement is similar to that of other companies of our size,” Lord
added. “We want to ensure legislators are aware of modern agriculture, digital tools
for agriculture and the latest innovations that are important to farmers.”

Syngenta spokesman Paul Minehart said the decision to hire Squire Patton Boggs on
environmental issues did not reflect a growing focus on environmental regulations.

“We regularly assess our advocacy resources and revise as needed,” he said in an email.
“Providing information on federal environmental regulations is key for US grower productivity
and competitiveness, and we support environmental policy that is science-based, meets
grower needs and protects our environment.”

To contact the reporter on this story: Tiffany Stecker in Washington, D.C. at
tstecker@bna.com

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